Overview of The Book

Tough times call for tough medicine, and the recession caused by the subprime mortgage crisis qualifies as tough times.

Coverage of the crisis focused on what government did wrong, what banks did wrong, and what financiers did wrong. The media began referring to exotic derivatives that blew up when housing prices fell as “toxic assets.” They included mortgage-backed securities (MBSs), collateralized debt obligations (CDOs), and credit default swaps (CDSs). “The government, banks, and big business failed the American people,” they howled.

True, but they’ve always failed the American people — and always will. They’re not trying to help the people, they’re trying to fleece them. And you know what? They’re succeeding.

Notice that recent financial reform didn’t reform much of anything. It didn’t even reinstate the separation of investment banks and depository banks that had protected the American economy under the Glass-Steagall Act of 1933 until Lawrence Summers and others in the Clinton administration repealed it in 1999. That repeal paved the way for the subprime mortgage crisis to begin under the Bush administration. Then, President Obama was supposed to be a fresh face in town, a fresh start for America, but whom did he appoint as his economic advisor? That same Lawrence Summers. Fine new line-up in Washington, eh? No wonder the financial crises just keep a-comin’, age after age, and always will.

The only shock is that people are so financially stupid that they still don’t understand the many ways that government, banks, and big business work to trap them with debt. Without stupid people who signed on to loans they had no hope of ever repaying, the banks could not have created the subprime crisis.

Financial people are everywhere in society’s leadership positions, pulling levers to make every option in front of citizens hazardous to their wealth. Financially stupid people are everywhere among the population, failing to grasp what’s really going on and repeatedly making choices that benefit the schemers. That idea leads to this book’s title: Financially Stupid People Are Everywhere: Don’t Be One of Them.

For years, other financial authors and I have written millions of words showing in great detail how to make budgets, set goals, buy carefully, and stay out of debt. To what avail? The population is still woefully incapable of managing its finances. The mistakes people make with their money are so basic, so avoidable that it’s clear they haven’t spent even ten minutes reading about personal finance. Maybe the books bored them. Maybe they were too long. Maybe they lacked the big-picture view of society’s fraudulent backdrop as motivation to avoid getting suckered by the machine. Regardless, the same polite presentation of financial basics is not what’s needed. What’s needed is a smack upside the head, and this book is it.

I selected just four precepts that cover the most important parts of getting money right. I refer to these four as the First Rule of Finance and controlling the Three Cs of credit cards, cars, and castles. Castles means homes, but specifically the modern-day monstrosities meant to impress the Joneses.

In tough language, I present the four precepts, then show how rubes failing to follow them allowed the subprime crisis to develop. It’s time we stop blaming only the institutions that have a record of failing us, become adults by taking responsibility for our part in the mess, and achieve financial freedom for ourselves by managing our own money correctly. It isn’t hard to do!

I researched thoroughly and took extra time in the book to expose how government and banks have a long history of collusion that takes money from unwary citizens, and how big business jumps onboard to get its fair share. The result is a society built on consumption and debt, where the path of least resistance takes people directly to where they don’t want to be. Breaking free requires swimming upstream by living a little differently.

The title of this book hits hard, and so does the language inside it. My goal is to shake people back to their senses, even if it makes them a little angry in the process. We should all be angry! Our nation’s future is at stake because neither the citizens nor the politicians know how to stop borrowing and spending.